Data Totally Neutral
All of the indexes posted gains Thursday with positive internals on the NYSE and NASDAQ. The NYSE saw trading volumes increase from the prior session while those on the NASDAQ declined. The large cap indexes saw several technical improvements on the charts while the data is now neutral across the board. So in spite of the weak NASDAQ futures this morning, we are maintaining our near term “neutral/positive” outlook for the major equity indexes.
- On the charts, all of the indexes posted gains yesterday with positive internals on respectable trading volumes. The SPX (page 2) and DJI (page 2) closed above their near term resistance levels while the COMPQX (page 3) and NDX (page 3) made new closing highs. As well, the DJT (page 4) managed to regain its 50 DMA. But while the MID (page 4), RTY (page 5) and VALUA (page 5) managed to post gains, they all remain in near term neutral patterns while the rest are in short term uptrends. The cumulative advance/decline lines for the All Exchange and NYSE remain neutral and above their 50 DMAs while the NASDAQ cumulative A/D is negative but also above its 50 DMA.
- The data is now neutral across the board. All of the McClellan OB/OS Oscillators are neutral (All Exchange:+29.89/-17.2 NYSE:+48.13/-11.67 NASDAQ:+15.05/-23.8) as are the Equity Put/Call Ratio (0.61), Total P/C (0.82), OEX P/C (1.31) and OpenInsider Buy/Sell Ratio (45.0). Valuation finds consensus forward 12 month earnings estimates for the SPX of $168.03 leaving the forward 12 month p/e for the SPX at 16.9 versus the “rule of 20” implied fair value of a 17.1 multiple and a 5.9% earnings yield.
- In conclusion, while the NASDAQ futures are down significantly this morning due to an earnings disappointment from one of its major components, we have yet to see enough of a shift in the weight of the evidence that would cause a change from our current “neutral/positive” near term outlook for the major equity indexes.
- SPX: 2,790/2,853
- DJI: 25,000/26,000
- NASDAQ: 7,748/NA
- NDX: 7,284/NA
- DJT: 10,623/10,940
- MID: 1,968/2,008
- Russell : 1,654/1,712
- VALUA: 6,365/6,487